Sunday, 13 September 2015

Final courts’ obligations to refer questions: the CJEU clarifies CILFIT

Daniel Sarmiento,
Professor of EU Law at the University Complutense of Madrid*

Last week I
published a post onSchipani v Italy, where I suggested that the
Strasbourg court (the European Court of Human Rights) was becoming much
stricter with national supreme courts’ duties to make preliminary references to
the Luxembourg court (the CJEU) than the CJEU itself. I pointed at this paradox
with a reference to CILFIT, hinting that this judgment had probably been a
source of judicial rebelliousness and that the Court of Justice was not doing
much about it.

I
am very happy to say that the Court of Justice has now proved me wrong.

In
a landmark judgment delivered in the case ofFerreira da Silva, that
Court, for the very first time in history, stated that a supreme court had
breached its duty to make a preliminary reference under article 267.3 TFEU.
After many years in which CILFIT
seemed to be an open invitation to national courts of last instance to do as
they saw fit when deciding whether to make a reference or not, the acte claire doctrine has finally taken a
bite.

I
must admit that the facts of the case made it difficult for the Court to reach
a different outcome. The Portuguese Supreme Court had clearly misapplied a
long-standing case-law of the Court of Justice on transfers of business and
acquired rights of workers, using a criteria of interpretation that had been
openly rejected by the Court in the past. In this regard, the Portuguese
Supreme Court had obviously not complied with the CILFIT criteria. But, as you all know, the CILFIT criteria are so
broad and, at the same time, so exhaustive and difficult to comply with, that
maybe all Supreme Courts of the EU have every now and then breached Article
267.3 TFEU. So why has the Court of Justice now decided to become a strict
guardian of the acte claire doctrine?

The triggering
factor in Ferreira Silva seems to be
the fact that there had been strong contradictions between the courts of
different Member States. It appears that there were also considerable
contradictions in the interpretation of Directive 2001/23 (concerning
the rights of workers when a business is transferred) in Portugal among first
instance courts, but the Court of Justice stated that such circumstance was not
enough to entail a breach of Article 267.3 TFEU. What seems to be important for
the Court is the combinationof national conflicting decisionsandother conflicting decisions among
other Member States that have resulted in preliminary references to the Court.
In the Court’s own words:

“43. However, so far as the area under consideration in the
present case is concerned and as is clear from paragraphs 24 to 27 of this
judgment, the question as to how the concept of a ‘transfer of a business’
should be interpreted has given rise to a great deal of uncertainty on the part
of many national courts and tribunals which, as a consequence, have found it
necessary to make a reference to the Court of Justice. That uncertainty shows
not only that there are difficulties of interpretation, but also that there is
a risk of divergences in judicial decisions within the European Union.

44. It follows that, in circumstances such as those of the case
before the referring court, which are characterised both by conflicting lines
of case-law at national level regarding the concept of a ‘transfer of a
business’ within the meaning of Directive 2001/23 and by the fact that that
concept frequently gives rise to difficulties of interpretation in the various
Member States, a national court or tribunal against whose decisions there is no
judicial remedy under national law must comply with its obligation to make a
reference to the Court, in order to avert the risk of an incorrect
interpretation of EU law.”

Another interesting
aspect of the case is that the main proceedings concerned an action for damages
against the Portuguese State, as a result of the judgment of the Supreme Court
that breached Directive 2001/23. In this regard, the Court of Justice was faced
with Portuguese damages law, according to which an action for damages against
the Statecan only be inadmissible if the decision that caused the loss
or damage has not been set aside. According to the Court, this requirement
makes it too difficult to claim damages and thus breaches the principle of
effectiveness.

Following the
precedent ofTraghetti del Mediterraneo,
the Court has taken the chance to strike out another burdensome procedural rule
whose main task is to keep the courts safe from damages actions. But in Ferreira da Silva the Court has gone
even further: it has not only challenged a Supreme Court for the way in which
it has handled EU Law and its duty to make a reference, but it hasalso, all in one
decision, removed another brick in the wall that protect national courts from
intrusive (but sometimes rightful) litigants invoking EU Law.

I believe this is
very good news and this judgment should be welcome by all EU lawyers. The
situation in some Member States, particularly in courts of last instance
handling requests to make references, had become troublesome. Every EU lawyer
with experience in the bar knows this. In Ferreira
da Silva it seems that the Court has finally taken measures and it has sent
a clear message to its national counterparts. The facts of the case make it
easy for the Court to justifiy this decision, so national judges can hardly complain
for having to cope with too stringent an interpretation of Article 267.3 TFEU.
The Court has made a wise move and has chosen the right case to do it.

Ferreira
da Silva was not rendered by the Grand Chamber, but maybe that makes
sense. After all, the Court has simply implemented its previous consolidated
case-law, which had been reaffirmed many times by the Grand Chamber. And
furthermore, seeing Koen Lenaerts sitting in this five-judge chamber is a sign
that the judgment can be as good and solid as a Grand Chamber decision.